WHEREAS, after a recent survey and further study of the
prevailing retail prices of cigarettes in relation to the retail price
brackets and the corresponding tax rates prescribed under Presidential
Decree No. 69, it has been found that the rising cost of production
leaves the manufacturers no more leeway for any future price adjustments
in selling prices which may prejudice the profitability of the
cigarette industry as a whole;
WHEREAS, the tax rates prescribed under said Decree include
one tax rate of P8.00 per thousand for two classes of cigarettes having
different maximum retail prices which may result in confusion and
difficulty in the implementation, to the prejudice of the effective
collection of the correct amount of specific tax on the cigarettes
concerned;
WHEREAS, the maximum amount of manufacturers' and
importers' bond provided for under Section 156 of the National Internal
Revenue Code, as amended by Presidential Decree No. 69, has been found
to be too onerous and cumbersome on the part of the taxpayers concerned
and determined to be impracticable in line with the current practice in
the field of insurance; and
WHEREAS, despite the deferment of the effectivity of the new
rates of specific tax on cigarettes by virtue of Presidential Decree
No. 88, dated January 3, 1973, the Bureau of Internal Revenue has found
it physically impossible to have strip stamps under the new rates of
specific tax printed abroad as required by Section 5 of the National
Internal Revenue Code, as amended, and further, majority of cigarette
manufacturers have manifested that they have big quantities of old
stocks of packing materials without the maximum retail prices imprinted
thereon, which if not allowed to be used would mean unnecessary loss on
their part due to obsolescence by operation of law and as prescribed
under Presidential Decree No. 69;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers in me vested by the Constitution as
Commander-in-Chief of all the Armed Forces of the Philippines and
pursuant to Proclamation No. 1081, dated September 21, 1972, and General
Order No. 1, dated September 22, 1972, as amended, do hereby order and
decree:
That Section 137 (b), Title IV, of the National
Internal Revenue Code, as amended, is hereby amended to read as follows:
"SEC. 137. Specific tax on cigars and
cigarettes. — On cigars and cigarettes there shall be collected the
following taxes:
x x x
"(b) Cigarettes
"(1) On cigarettes packed in thirties, the retail price of
which per pack does not exceed fifty centavos, on each thousand, three
pesos.
"(2) On cigarettes packed in thirties, the retail price of which per
pack exceeds fifty centavos but does not exceed seventy centavos, on
each thousand, five pesos.
"(3) On cigarettes packed in twenties, the retail price of which per
pack does not exceed eighty centavos, on each thousand, eight pesos.
"(4) On cigarettes packed in twenties, the retail price of which per
pack exceeds eighty centavos but does not exceed one peso, on each
thousand, fourteen pesos.
"(5) On cigarettes packed in twenties, the retail price of which per
pack exceeds one peso but does not exceed one peso and forty centavos,
on each thousand, sixteen pesos.
"(6) On cigarettes packed in twenties, the retail price of which per
pack exceeds one peso and forty centavos but does not exceed one peso
and sixty centavos, on each thousand, eighteen pesos.
"(7) On cigarettes packed in twenties, the retail price of which per
pack exceeds one peso and sixty centavos, on each thousand, twenty-five
pesos.
"(8) If the cigarettes of local manufacture are mechanically wrapped or
packed, the tax shall be increased by one hundred and twenty per
centum per thousand cigarettes.
Cigarettes shall be considered as mechanically wrapped or packed when at
any stage of the wrapping or packing a machine or any mechanical
contrivance shall have been used.
"(9) If the cigarettes arc of foreign manufacture, the tax thereon shall
be the same as that prescribed under sub-paragraph (7), paragraph (b)
of this Section, plus one hundred twenty per centum."
That Section 156, Title IV, of the same Code is hereby amended
to read as follows:
"SEC. 156. Manufacturers' and importers' bond. —
Manufacturers and importers of articles subject to a specific tax shall
give bond in an amount equal, as nearly as can be estimated, to twenty
per centum of the taxes payable by them during an average year. Such
bond shall be conditioned upon the faithful compliance, during the time
such business is followed, with the law and regulations relating to such
business and for the satisfaction of all fines and penalties imposed by
this Code. No such bond shall be required in an amount exceeding five
hundred thousand pesos nor be received in a sum less than ten thousand
pesos.
That Presidential Decree No. 88, amending the effectivity date
of Section 5 of Presidential Decree No. 69, particularly Section 137 of
the National Internal Revenue Code affecting Specific Tax on Cigars and
Cigarettes is hereby further amended by resetting the effectivity of